Buy, buy, buy: Holiday shopping 2010 may break records

Spending was strong since the start of the holiday shopping season in November and the momentum continued through Christmas Eve, a surprising sign of strength for the economy. Consumer spending accounts for about 70 percent of U.S. economic activity.

People spent more even as they held on to frugal habits learned during the Great Recession, from focusing on big bargains to paying with cash. That conservative shopping mentality was clear as shoppers rummaged through clearance bins at stores and malls this week.

"I don't want to go any deeper into debt," said Dana Hall, 36, who arrived at Atlantic Station, a downtown shopping complex in Atlanta, on Sunday while killing time before picking up a passenger at the city's airport. Hall said he had kept his job throughout the recession, but the economic troubles turned him into a cash-only shopper.

Stores headed into the season with angst that they would have too much inventory. That's because they placed most of their orders in the spring when the economic recovery looked stronger than it seemed later in the year.

But stores struck the right notes to get careful holiday shoppers to buy more. They rolled out discounts starting in late October to cater to shoppers who wanted to stretch out their buying.

Merchants called it right in anticipating that gift givers would scrimp less and buy nicer, more traditional presents, like sweaters rather than pots and pans and other utilitarian gifts that were popular the last two years.

Free shipping was practically a given for online sales, which rose 15.4 percent, according to SpendingPulse. Stores stayed open later and some pulled all-nighters.